In the prior art market segmentation studies often identify characteristics associated with profitability such as urban location, high income area, the existence of a drive through, etc. These studies then determine the effect of these variables on profits. The problem with this technique is that is fails to take into account the effect of prices on profitability.
Accordingly, a need exists to provide an improved method to group stores in common economic markets. The present invention solves this need via a method for assigning retail units to distinct economic markets by identifying observable characteristics that affect the relationship between price and profits, and for using these characteristics to group stores economically.